In past decades, the banking industry largely adopted a blanket approach to revenue management. Banks would typically implement universal pricing strategies for their corporate customers, and these prices would usually be fixed according to the product line.
Gradually, banks have woken up to the idea of adopting dynamic revenue management practices, especially when their corporate clients began demanding lower interest rates, greater pricing transparency, and custom service among others.
A forward-thinking financial institution knows that it’s the right time to diversify their revenue sources and broaden the horizon for new business, both at home and abroad. Where do you see your bank in this equation, and what more can you do to generate fresh revenue?
Below is a short treatise on improving your earnings for your corporate banking services through innovative new revenue management solutions. Here’s how you can retool your bank’s plans, processes, and technologies to achieve better revenue management.
Find the Reasons Behind Revenue Leaks
Before you can think about improving your revenue management practices, you must first be able to understand where your chief problems are coming from. On average, between 3% and 8% of missed revenue opportunities can be attributed to leakage. Common culprits are incongruent prices or badly designed billing processes. Which one does your bank suffer from?
One thing that can help you arrive at the answer is a revenue management platform with advanced calculation, reporting, and analytics capabilities. You’ll be able to do the following with better revenue management technology:
- Quantify just how much revenue your system may be leaking, down to the penny
- Determine where the biggest leaks are coming from (in terms of product type, corporate customer demographic, or region)
- Figure out how to improve your pricing controls
- Resolve to break down obstructive siloes in your pricing and billing practices
Simply put, a better system will allow you to become more knowledgeable about why you’re losing revenue opportunities. This, in turn, will help you arrive upon the best solutions to secure those opportunities for good.
Aim to Achieve Smart and Transparent Pricing
As demonstrated by today’s hyper-personalized corporate banking environment, there’s no future to be had in a generic and one-size-fits-all pricing strategy for all your clients. You’ll need revenue management tools that are capable of smart pricing, or adjustment of prices as the clients’ circumstances change. You should be able to assign prices based on unique scenarios, given how diverse your corporate clients’ needs are.
However, don’t forget to uphold full pricing clarity to your customers after you make any big changes to your pricing system. Involving your clients in pricing governance will be the key to retaining their trust, as well as fostering an impression of integrity and future-readiness on the part of your bank.
The outcome of achieving fast and exact pricing, as well as instant billing and fee collection, will be greater satisfaction from your corporate customers. Their confidence in your bank’s system and the trust they repose on your corporate services is worth its weight in gold. For sure, it will contribute toward customers developing longstanding loyalty to your bank over competing brands.
Boost Your Team’s Efficiency at Overseeing the Revenue Management and Billing Cycle
Now is also the perfect time to unify your pricing, billing, and collection processes and to retool your entire revenue management system to be more customer-centric. Doing so will add value to your bank by way of sheer business efficiency. While you’re maximizing your revenue opportunities, you’ll also be saving money that would otherwise bleed through your system.
Don’t delay your plans for streamlining and automating key processes in your revenue management and billing cycle. You’ll be able to feel the boost in operational efficiency and the benefits of having a better visibility over your finances.
Determine the Right Products and the Right Prices for Each of Your Corporate Customers
Lastly, try to envision a revenue management strategy that anchors itself on a personal touch. You will be able to build solid revenue, for example, by offering customized corporate banking products that truly resonate with your clients’ needs. Reward these same clients with discounts and bundled pricing, and oversee the implementation of these perks from your refurbished revenue management system.
It’s also possible to increase your earnings from fee-based income by upselling value-adding advisory services to corporate clients. These include services that will help them navigate through an increasingly complex regulatory environment or facilitate their breakthrough into global markets.
Clients are more likely to choose you as their provider if they know that you have an idea of how their industry works, plus what kind of banking service they need in order to meet their goals. Treat your corporate clients like the VIPs they are, and convert them from one-time customers into legacy business partners.
Final Words
You may not need to reinvent your product line or cast your net very far into the corporate market for a multitude of new clients. Opportunities to generate more revenue are just within reach, i.e. within your internal structure. Revisit your revenue management system now to find strong earning opportunities for your bank in the near future.
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Source: Vietnam Insider